Short on dark fiber inventory, PG&E moves toward selling lit service

by Steve Blum • , , , ,

PG&E has revealed more details about its telecommunications business plan. In testimony filed with the California Public Utilities Commission, as it seeks permission to expand its telecoms service offerings, PG&E reiterated that it has no intention of offering residential fiber to the home service, or otherwise competing in the retail space. But its motivation for providing “lit” fiber service to wholesale customers appears to be greater than previously assumed. And so is its interest.

Right now, PG&E is leasing dark fiber – bare strands of glass – to a few customers, either fiber it installed on its own poles, towers and conduit for its own use, or installed at a telecoms company’s request (and expense). There’s not much more of that inventory available, though. Of the 2,600 miles of cable it owns, only 1,000 miles has spare capacity that might be leased out. On average, that spare capacity amounts to only about 4 fiber strands, enough to offer two customers a pair of dark strands each.

Although it doesn’t make a direct connection to this very restricted dark fiber supply, PG&E clearly states that it intends to move up the value chain and offer lit fiber service. Which would allow it to serve many customers on a single pair of fiber strands…

PG&E proposes to offer “lit fiber” and other services (as market demand and availability of PG&E facilities allows) to third-party communication services providers, communication companies, and large institutional (wholesale) customers that need point-to-point services along routes where PG&E can make lit fiber available. Lit fiber is fiber optic cable that has electronic equipment (such as transmitters and regenerators) connected to it to “light” the fiber, enabling the transmission of data. In providing lit fiber, PG&E would be the service provider, owning and maintaining the equipment to light the fiber. The customers would be free of the maintenance and operation of the equipment. This contrasts to the dark fiber services that PG&E currently provides where the customers are responsible for providing and maintaining the equipment that lights the fiber.

Mobile carriers and infrastructure companies are called out as particularly good prospects. PG&E sees a sweet spot in providing long haul connectivity, via lit fiber, to mobile and other telecoms companies that need to tie a lot of far flung locations into their core networks.